The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1901-12-26
3ENEYTIT TO
N,lDRTKvyES1
Mr.. Hills Statement
en- RAILWAY MERGER
Securities Company Was Organized
to Prevent Union Pacific From
Getting Northern Pacific and
DivertinS Trade South.

President James J. 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 coh-
solidation a merger of the Northern Faclh'
and Great Northern railways and in this dis
cussion statements have been maze whicl al
so widely different from the facts that feel
called unon to make a conservative statement
of Just what has been done In the past aioI
what will be done in the future.
When the Northern Pacific failed ana thei
banking house of J. p. Morgan co. reorsah'
lied it, myself and friends were holuerS y. d!
large amount of that company secuil'ieS
After the reorganization was completeo VIZ
houebt about $4,000, 900 of Northern Paclhci
stock both common and preferred. oonie Oh
this stock was afterward sold by lnolVtouas'
but large amount mas peen heiu ~
time the present.
About a year ago the Union Paclnc company
bought the Huntington and other interests In:
the Northern Pacific and at the same tithe,
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 PACING anGI
Gil eat Northern would be
Largely Shut Out
If the States of Nebraska, Kansas, MISSOURI
South Dakota, Iowa, Illinois and Wisconsin,
except by using other lines OF railway some
of which were in the market 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 Paclnc, maze
proposals to the directors of the Burlington tc
buy their entire property. When this transac-
ton was about being closed the people VINO
represented the Union Paetic cpmpany, an. ana
y6 naE previously tried bay me Burning ton
asked to be allowed to share with us in the
purchase of that company; this proposal we 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
was located.
At that time, against the opposition of the
more southerly lines both the Northern Pacific
and Great Northern had put into effect 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 we had close 1
the purchase of the Burlington the Union Pa
cific people undertook the boldest effort that
made in this country and bought
over sixty millions of the stock of the North
ern Pacific in the markets of Europe and the
United States I in New York at the time
and after Messrs. Morgan & Co. were aware
of the action of the Union Pacific people it was
found that together held about 26OO0 600
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 large an investment,
bid the stock UP until there was the laTsest
stock corner ever known; the common stock
in three 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 one of my
friends in London, who owned 100000 of
Northern Pacific common. was offered and re-
fused $4,000 900 for his stock. The result
was that Messrs. Morgan & Co. and ourselves
owned 100000 out of 100000 of the
Northern Pacific comm On, with the privilege OF
paying off me ~. o0O.O 600 of Northern Pacific
preferred. The Union Pacific people owned
81, 900, 900 of the common and about AZ, 600, 600
preferred,
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 it 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 a 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
Could Not Legally Act
as 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 &
Manitoba company and who have always been
among it's largest shareholders, but not the
holders Of 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 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
troll of the Union Pacific interests and with y
the Joint control Of the Burling toni to pay of
the seventy five millions of Northern Pacific
preferred. The enormous amount of cash re-
small number of men made 1t necessary fol
them -.
To Act Together
in a large and permanent manner, through the
medium Of corporation and the Northern
Securities company afforded them the means
of accomplishing this object without the neces-
sity of creating a separate company to finance
the transaction for the Northern Pacific;
while, at the same time. the credit of the
Northern Securities company would be much
stronger, as 1t would also hold considerable
~ Graz nd
The Northern Securities company is organ
lied to deal in high-class securities, to hold
the same for the benefit OF it's shareholders and
to advance the interests of the corporations
whose securities 1t owns. It's powers do no,
include the operation of railways. banking.
mining nor the buying selling of securities
or properties for others on commission; 1t Is
pursly an investment oomnany and tha- oh.