The daily morning journal and courier., 1901-11-14
X GREAT RAILROAD DEAL
SETTLEMENT OF FIGHT FOR THE NORTHERN PACIFIC.

Par January I, 1909 A Security Com-
 pany Incorporated With Capital of
 S4OU, 1000 to Take Over and Control
 the securities of the Companies In-
 voIved
 New York, Nov. 13.-There were two important developments in the railroad situation in the Northwest to-day and both tended to confirm the existing be- lief that a final basis of settlement of the contest for the control of Northern Pacific had been definitely agreed to- Final ratification of this agreement will bring into being the greatest and most effective example yet of the com munity of interest ideas as applied to the railroad systems of the country. The first of to-day's developments was the incorporation at Trenton, N. J., of the Northern Securities company with a capital stock of $400, 100000 and the second was the unanimous adoption by the Northern Pacific directors of resolution providing for the retirement at par of the companys preferred stock on January 1. 1902.
 There was a full attendance at the meeting at which this acton was taken, those present including George F. Baker and Charles Steele, representing J. P. Morgan 6 Co., E. H. Hartman of the Hartman syndicate, which IS in control of the Union Pacific; James J. Hill, president of the Great North ern; Samuel Rea, vice president of the Pennsylvania James Stillman of the National City bank; H. McK. Twomb- ley, representing the vanderbilts, and William Rockefeller.
 The directors decided that the funds necessary for the retirement of the pre- ferred stock should be obtained by the sale at not less than par of $75,OOoo 900 of per cent. bonds convertible into common stock, each holder of common stock which is now outstanding being entitled to purchase at par an amount equal to seventy-five eightieths of the amount of his present holdings. It was further provided that two dividends of i per cent each be paid on the prefer red stock before it's retirement.
 Samuel Spencer was elected a mem Der of the board in place of Robert Ba- con, resigned, and the board was or ganized by the reelection of all of the company's present officers.
 No official statement was obtainable this afternoon as to the scope of the newly incorporated Northern securities company, but it is generally understood that the company was formed to take over and control the shares of the Northern Pacific and the Great North ern railways and of their leased lines The Great Northern's outstanding cap ital is $125 ,00O par value, selling at 200 in the market, while the Northern Pacific's total outstanding stock, after the retirement of the preferred, will be $S0, 900, 900 par value, making total of $2O5 50OO, ,000 par value, for the shares of these two companies. At 200 for Great Northern, the amount would be in creased to $33O, ,000 for the shares of the two companies.
 Burlington shares, 1t is understood, are not to be turned over to the new Northern Securities company. That stock is now held as collateral for the outstanding Burlington collateral bonds, with voting rights vested in the Northern Pacific and the Great North ern railways. It is understood that the Union Pacific and the Chicago and Northwestern interests agreed to the retirement of Northern Pacific prefer red and that the Union Pacific will have heavy interest in the capital of the new company, considerably beyond the par value of their present Northern Pacific shareholdings, which are placed
 ,1oto y,1o jority of the total $155,00O,OO0 Northern Pacific stock capital. No information was obtainable as to what share, if any, the Vanderbilts and the Chicago, Milwaukee and St. Paul are to have in the new company.
 Under the new arrangement, the Union Pacific railway will have voting rights in the Burlington, the board of directors being about evenly divided between the Union Pacific and the Hill interests. The suggestion was made to-day that the Burlington stock may be held in voting trust, under the agreement between the two interests If this be the case J. F. Morgan will be voting trustee.
 As the control of the Burlington road by the Great Northern Northern Paci- fic interests, followed by the struggle for Northern Pacific shares, caused the affair which reached settlement to- | day. the disposition of the Burlington, is an interesting question In that regard the Journal of Commerce tomorrow will say that the Burlington is to be restored by the Northern Paci- fic and the Great Northern, who now own it, to a practically independent ba- | sis and enjoy full and free traffic rela- tions with all it's connections. This in- [ dependence is to be secured through a lease by the present owners to a new company formed for the purpose. This is the Chicago, Burlington and Quincy Railway company, incorporated un- der the laws of Iowa with capital of S1oo, 900, ,O00 The terms of the lease may he announced after the meeting of the r old Burlington company to-day (Thurs- day), but it is supposed that they will | fully protect the Great Northern and Northern Pacific In their guarantee of the bonds by which the Burlington was purchased.
 After the meeting of the Northern Pacific directors J. J. Hill and George F Baker went to MT. Morgan's office and had a conference with him. Later Jacob Schiff of Kuhn Loeb & Co.,, and ID H. Hartman called there. All de- clined to be interviewed.