The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1901-11-14
The Northern Securities Company
Incorporated as a Holding
Company for Railroads in Vast
Northwestern Combine
NORTHERN PACIFIC CONTEST
SATISFACTORILY SETTLED
Company's Preferred Stock is to
Be Retired at Par, Jan. |, 1902,
Funds to Be Obtained by Sale
of Four Per Cent Bonds Con-
vertibIe Into Common Stock

important developments IN the railroad
situation in the Northwest today and
both tended to confirm the existing be-
lief that 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 idea as applied to
the railroad systems of the country.
, The first of todays developments was
the incorporation at Trenton, N j.,
of the Northern Securities Company
with a capital stock of $500 900 and
the second was the unanimous adop-
ton by the Northern Pacific directors
of a resolution providing for the re-
tirement at par of the company's pre-
, ferred stock on Jan. /, 1902.
There was a full attendance at the
meeting at which this action was taken
those present including George F.
Baker and Charles Steele, representing
J. P. Morgan & Company; E. H. Har-
riman of the Hartman syndicate
which is in control of the Union Pa
cific; James ]. Hill, president of the
/ Great Northern; Samuel Rea, vice
president of the Pennsylvania; James
Stillman of the National City Bank;
H. Nick. Twombley, representing the
Vanderbilts and William Rockefeller.
The directors decided that the funds
necessary for the retirement of the
preferred stock should be obtained by
! the sale at not less than par Of 75,000,-
900 four 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 seYenty-five eightieths of the
amount of his present holdings 1t was
/ further provided that two dividends of
| one per cent each be paid on the pre-
ferred 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 Securi-
| ties Company but it is generally I'M
| derstood 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
| capital is S125, 000,000 par value, selling
at 200 in the market, while the North
| ern Pacifics total outstanding capital,
! after the retirement of the preferred,
| will be $S0,000,0 00 par value, making a
| total of $205, 600 900 par value, for the
shares of these two companies. AT
200 for Great Northern, the amount
would be increased to- 330,0O0,O0O for
| the shares of the two companies.
Burlington shares. it 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. 1t is understood the IN
ion Pacific and the Chicago & North
western interests agreed to the retire
ment of Northern Pacific preferred and
| that the Union Pacific will have a
| heavy interest in the capital of the
new company, considerably beyond the
| par value of their present Northern
| Pacific shareholdings, which are plac-
| ed at $7S,000,000 par value, just over a
majority of the total $155, 600 900 North
| ern Pacific stock capital.
! No information was obtainable as to
what share, if any, the Vanderbilts
and Chicago, Milwaukee & st. Paul are
! to have in the new company. Under
| the new arrangement the Union Pa
cific 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 today that
the Burlington stock may be held in a
voting trust under the agreement be-
! tween the two interests. If this be the
case, ]. P. Morgan will be a voting
| trustee.
After the meeting of the Northern
Pacific directors, ]. J. Hill and George
| F. Baker went to Mr. Morgans Of
| flee and had a conference with him
Later. Jacob Schiff, of Kuhn, Loeb &
| Company and E. H. Hartman called
there. All declined to be interviewed.
A member of the firm of J. P. Nor
gan & Company said the Northern Sc
curities Company would be the holding
! company for the various roads inter-
ested but he declined to tell what rail-
! roads these were, on the ground that
the details are not yet completed, and
premature publication might interfere
with the contamination of the plan.
You may rest assured" he said,
that all difficulty over the Northern
Pacific matter is now at an end, and
this has been accomplished in a man
ner highly satisfactory to all con-
]