The San Francisco call., 1901-12-22
'HILL UNFOLDS
RAILWAY SECRET
Great Northern Presi-
dent Tells About
Combinations.
Denial Is Made Of the Stories
About a Great
Merger.

ST. PAUL. Dec. 2L-President J. J.
Hill Of the Great Northern Railway and
Of the recently organized Northern Secu-
rites Company this afternoon gave out
the following statement:
have been absent from Minnesota more than
Two months and during that time there has
Nirlsen wide discussion throughout the State
of what has been generally called a consolida-
tion or merger Of the Northern Pacific and
Great Northern railways. In this discussion
statements have been made which are widely
oif1erent from the facts that I feel called upon
TO make a statement Of just what has been
done IN the past and what VIII be done in the
When the Northern Pacific failed and the
oanklng-house Of J. P. Morgan s. Co. reoz-
OF q large amount OF that mpany's security
AFTER the reorganization was completed we
bought about tgenty-six millions Of Northern
EAclnc STOCK, both common and preferred.
Some OF this stock was afterward sold. but
4o s. s1-esaS D mas oeeh hela rom tnat lime time
Pacific Company bought the Huntington and
other Interests in the Northern Pacific and at
tne same time made an effort 70 get the con-
uol OF the Chicago. Burlington and Quincy.
Win these lines in the hands OF the Union
Eaclnc interests both the Northern Pacihc and
Sreat Northern would be shut out Of Nebraska.
kansas Missouri, South Dakota. Iowa Illinois
ana Wisconsin, except by using other lines OF
railway, some Of which were in the market
for sale and might al any time pass under
the control be combined with the Union
Pacific interests. We then, with the Northern
Pacific. made proposals to the directors Of the
Burlington 70 buy their entire property. When
this transaction was about being closed the
people who represented the Union Pacific Com
pany and who had previously tried to buy the
Burlington. asked to be allowed TO share with
US IN the purchase Of that company: this pro-
defeat our object in buying the Burlington.
and further II was against the law Of several
OF the States IN which the longest mileage OF
the Burlington was located.
= Big Purchases Of Stock.
At that time. against opposition Of he
more southern lines, both the Northern Paciho
and Great Northern had put into effect low
colonization rate and were carrying daily thou
sands OF people into the Northwest many Of
whom were coming from Kansas and Nebraska
4DrfI sn6 sfter we had c5osed - the 1urcbasa 0f
the Burlington the Union Pacific people un-
dertook the boldest effort that ever was made
IN this country and bought over sixty millions
Izets OF Europe and the United States was
IA New York at the time and after Morgan &
Co. were aware Of the action OF the Union
Pacific people 1t was found that together we
held about twenty-siX millions Of Northern Pa
enc ooiIon STOCK 1s[ucn a. tne cor c9pn non
preferred stockholders when the company was
ilege OF paying on the preferred stock at par
on the lst day Of January OF any year until
1917, Morgan & Co. then bought IN London and
New York about sixteen millions OF the com
mon stock OF the NORTHERN Pacific. At the
already 50 large investment bid the stock
Up until there was the largest stock corner ever
known. The common stock in three or four
days went Up 70 $1,000 per share.
I explained TO my friends how that. with
PacIo Would @ eo1troI 1 rtiT NSt S fii0d on
the West from Mexico to the Canadian line
except for the Great Northern. So great was
the ef1ort 10 get this control that one OF my
friends in London who owned two millions Of
Northern Pacific common was offered and re-
The result was that Morgan & Co. and our
selves owned forty-two out OF eighty millions
Of the Northern Pacific common. with the priv
Northern Pacific preferred.
The Union Pacific people owned thirty-seven
millions Of the common and about for+v- +zvo
millions OF the preferred. which was a clear
majority OF all the stock Of the Northern Pa
cifc. and claimed the exclusive control OF the
Northern Pacific and through that ownership
of half OF the Burlington. When ii was
known that these preferred shares could and
tion mutual negotiations resulted In Mr. Nor
gan giving them q representative in the
Northern Pacific board. At the same time
was elected member Of the Northern Pacific
board. When was advised Of my election I
director OF the Northern Pacific and Great
Northern at the same time, and I resigned
after the first meeting Of the board.
Reason for the Combine.
Several OF the gentlemen who have long
been interested in the Great Northern Rail-
bine their Individual holdings IN corporate
FORM and IN that way secure permanent pro-
lection for their interests and a continuation
Of the policy and management which has
lone 50 much for the Development Of the
NOrLlMeSL OlL OF IIlls desire mas grown the
Northern Securities Company. It became nee
essary On order to prevent the Northern Pa
effc from passing under the control Of Union
Pacific interests and with II the Joint control
Of the Burlington to pay off these twenty
FIVE millions of Northern Pacific preferred
The enormous amount Of cash required for
this purpose from a comparatively small nUm-
Ger Of men made II necessary for them to act
together in q large and permanent manner
through the medium Of a corporation and the
Northern Securities Company accorded them
he means OF accomplishing this object with
sut the necessity of creating a company
% finance the operations for the Northern Pa
rife, whsle at the same time the credit OF
The Northern Securities Company would be
much stronger IS Il would also hold q con-