The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1901-12-31
Officers of the Northern Pacific
Railroad Company Are Re-
strained from Retiring the
Preferred Stock of Company
ORDER WAS SIGNED BY
JUDGE ELLIOT YESTERDAY
While 1t Was Issued on the Appll-
cation of Peter Power of New
York 1t Is Inferred the Action
Is Brought in Behalf of Harri-
man Interest


Minneapolis, Mimi. Dec. >30.-Judge
Elliot Of the District Court of Henri
pin County today granted a temporary
order restraining the officers of the
Northern Pacific Railroad Company
from retiring the preferred stock Of
that company. The order was issued
on the application of Peter Power of
New York, who holds 100 shares of the
common stock. 1t is inferred, although
it does not so appear, that the present
action is brought in behalf of the Har-
riman interest to prevent control pass
ing out Of the hands for another year,
or until the legal standing of the
Northern Securities Company Is set
tied.
The Injunction restrains the Northern
Pacific Railway Co. from issuing or
selling any debenture bonds or other
evidence of indebtedness, or creating
any Indebtedness of liability of any de-
scription, for the purpose of raising
money with which 10 pay or retire the
preferred stock of q e Northern Pacific
Railway Co., or from using or appro-
priating any moneys or proceeds, 9th
err than the ordinary or surplus net
earnings of the company tothe retire
ment of the preferred stock of said
company; also from creating any la
bility other than the ordinary liability
for the operating expense of its rail-
road system, and the indebtedness now
existing, which would take precedence
of the common stock of said company;
also from placing its property in the
possession or under the control of the
Northern Securities Co. or from enter
ing into any arrangement, through the
medium of the Northern Securities Co,
or otherwise, with the Great Northern
Railroad Co., the Chicago, Burlington
& Quincy Railway Co, or either of
them. for the purpose OF causing the
Northern Pacific railway system to be
operated in connection with, or by the
same authority as the other two roads;
or from entering into any agreement
with said companies, or either of them,
for the purpose of avoiding competition
and fixing rates.
The bill alleges that the Northern
Pacific Railway Co. and the Great
to the Pacific Ocean and that the Chi
cago, Burlington &s Quincy has a par
allel line from Billings, Mont. to Chi
cago and that al such lines are COM
peting for the business of the North
west.
1t is alleged that the officers of the
Northern Pacific Railway Co. during
ton with the Great Northern and the
Chicago, Burlington & Quincy the
purpose of which was to consolidate
the three systems under one manage
ment; and knowing that 1t could not
be legally effected, the directors of the
three companies, for the purpose of
doing indirectly, what they could not
do directly, caused to be organized
the Northern Securities Co., New
Jersey corporation, with a capitaliza-
ton of $400 600, 000 which was author
lied to hold the securities Of other cor
porations, the intention being to cause
a majority Of the stock Of all three
of the railway companies to be trans
ferred to the Northern Securities Co,
thereby suppressing competition, regu-
lating the tariff rates. and conducting
the entire business of the three sys-
tens as one corporation. That the
scheme was in violation Of the law of
this state andw of other states through
against the laws Of the United States
The bill also alleges that under the
charter of the Northern Pacific Com
pany. and under the provisions Of the
reorganization agreement, the pre-
ferred stock can be paid for and re-
tired only out Of the net surplus earn
ings OF the company, and not other
wise; that Notwithstanding these pro-
visions, the directors of the company,
as the first srep in transferring the
control Of me road TO the Northern
Securities Company. have served no.
tice upon the holders of the preferred
stock that on Jan. I 1902, they will re-
tire such preferred stock; that the
plaintiff says that no meeting of the
shareholders Of the defendant company
has been called TO make the issue of
the certificates of Indebtedness or de-
benture bonds; that the board Of di-
rectors is without power to issue such
certificates as is the company, that
at the time Of the issue of the Certifi-
Gates Of stock to the common stock
holders in 1898. andb V the re-organiza-
ton agreements. it was provided that
the company should not put a mort
gage upon the property Of the Northern
Pacific system. nor should the amount
of the preferred stock be increased, |
except by a consent Of the majority of
the holders of the whole amount Of the
preferred stock and the amount of the
holders of the majority of common
stock. TO be voted separately that il is
fCo1%fY,r7a.d ~, T1apa Hive