Courier Democrat. (Langdon, N.D.) 1891-1920, 1902-05-15
ORIGIN OF THE
RAILWAY MERGER
WHY SECURITIES COMPANY WAS opcAN,zrn
Answer FILED in U. S. Circuit Court Gives Purpose
1or WHICH company Was Formed and What 1t
was Expected to Accomplish-The Answer,

reach Denver. Kansas City, Omaha and
aurora, where are located the principal
smelters of siver-lead ores, such as are
mined near the lines Of the defendant
railway companies.
Ihey reach Omaha Kansas City and
Chlcaso, where are the great packing
houses and the great markets for the
cattle and sheep of the ranges of North
Dakota. Montana. Wyoming, Idaho, Ore
gon and Washington.
They reach st. Louis and Kansas City,
connecting them with lines traversing
the cotton states. from which come raw
| and manufactured cotton required for
shipment to China and Japan.
At Chicago and st. Louis they con-
meet with the lines which reach the
points Of supply of manufactured iron,
steel. machinery and other manufactured
articles that find a market in Japan and
China.
Reaches Coal supply.
The Burlington line southwark from
Minneapolis and St. Paul along the Mis-
sissippi river reaches the great coal dep
osits of Southern Illinois, the largest
west of Pennsylvania and West Vir-
ginia; and it's light gradients and con-
sequent low cost of transportation make
it possible to supply such coal to points
on the lines of each defendant railway
company east of the Missouri river, re-
lieving the people and the railways of
that territory from entire dependence
upon the Pennsylvania and West Vir-
ginia mines, the supply from which is
| yearly becoming most costly and less
certain.
| The price paid for said Burlington
stock was lower per mile of main track
covered by the stock than that for
which the stock of any other large and
we'll established system, in the same
ppOeral farritnrv how
| bought.
The purchase Of the Burlington stock
by the Northern Pacific and Great
Northern companies in equal parts
| served each company as well as if it
were the sole owner of such stock, while
| such purchase might have been beyond
| the financial means of either company by
itself.
| The Great Northern and Northern Pa
cific companies therefore each purchased
an equal number of shares of the Bur-
lington stock as the best means and for
the sole purpose of reaching the best
markets for the products of the territory
along their lines, and of securing connec-
tions which would furnish the largest
amount of traffic for their respective
| roads, increase the trade and interchange
of commodities between the regions. ira
versed by the Burlington line and their
| connections and the regions traversed or
reached by the Great Northern and
Northern Pacific lines, and by their con-
| necting lines of shipping on the Pacific
coast. These connections and such in
| terchange of traffic were deemed to be,
| and are, indispensable to the maintenance
of their business, local as we'll as inter-
| state, and to the development of the
| country served by their respective lines,
and of like advantage to the Burlington
| lines and the country served by them,
:. and strengthen each company in the COM
petition with the more southerly lines to
the Pacific coast, with the Canadian Pa
| ific railway and with European carriers,
| for the trade and commerce of the Orient.
! In such purchase there was no purpose
to lessen any competition of the Burning
| ton lines with those of either Of the pur-
chasers, for they are not competitive, or
to lessen any competition between the
purchasers. Such purchase was not in
! tended toha We, and it cannot have, any
such effect.
The purchase Of the Burlington stock
was not made in view of the formation
of this defendant, but solely from the
| motives and with the purposes already
| stated.
| Origin of Holding Company.
The project of forming holding COM
pany Of any kind was not the result, in
| any way, of the failure of the plan which
was defeated by the decision Of the SUI
| preme court in the Pearsall case. There
was no connection whatever between the
| two.
The project of a holding company which
finally developed into the formation Of
this defendant had it's inception years be-
fore that date, among several gentlemen,
not exceeding ten in number, who had
been large shareholders in the Great
| Northern company and its predecessor,
| bo Pa111 Minnaar n1ia no
Railway company; some of them from the
| original company in 1879, and others from
| dates not long after that time. They have
never held majority of the stock of the
Great Northern company, but have taken
an active interest in it's policy and admin
istration: have aided it when necessary in
| financing its operations; have acted to-
gether in promoting its interests; have
with some exceptions, served from time to
| time as directors and officers (Mr. Hill
| having been president of the Esuccesssive
| companies since 1882; and by reason of
their active interest in the company and
services to it, have Influenced, to large
degree, its policy and management. AS
| far back as 1898, most Of these gentlemen
being we'll advanced, and some far ad-
vanced, in years, they began to discuss
| together what would be the effect upon
| the policy, which under their influence the
company had pursued with great benefit
| to its shareholders and the pubic, should
their holdings by death or otherwise be-
come scattered and by what means their
holdings could be kept together. so as to
4 secure the continuance of such policy in
the management of the company. It was
considered that if company should be
formed to which they might transfer their
individual holdings, their shares were
likely to be held together, SO long as the
majority In the holding company should
so wish, and this would tend to give
stability to the policy of the Great North
ern company, be of aid to it in financial
| operations. and maintain the value Of
their investments. These conclusions were
| the result of various consultations among
| the persons mentioned, or some of them,
| but no definite agreement was made for
| forming such a company or binding any
one to transfer his shares to it if formed.
From time to time, beginning with the
| reorganization of the Northern Pacific
| company in 1896, Mr.. Hill and said other
Great Northern shareholders who had
discussed with him the plan of forming
holding company. had made large pur-
chases of Great Northern shares, individ-
| ually, each for himself without any con-
certed action, and solely as investments
| About May /, 1901, their aggregate hold
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