New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-03-11
NEW MOVES In TRUST CASES.
COMPLAINT AGAINST NORTHERN SECURITIES COMPANY
"A SWEEPING SUPREME COURT DECISION
KNOX'S PETITION FILED.
PUBLIC DECLARED MULCTED AND THE
SCHEME IN VIOLATION OF
THE LAWS

st. Paul March 1O-By direction OF the At
torney General Of the United States a bin in
equity was filed here to-day in the Circuit Court
Of the United States for the District OF Mime
sofa in the case Of the United States complain
ant. against the Northern Securities Company.
the Great Northern Railway Company. the
Northern Pacific Railway Company and others.
defendants, 10 test the legality OF the alleged
combination. or merger. OF the two roads and
others named in the bill The action is brought
under the act of July ? 1890. known as the.
Sherman Antitrust act.
After recitins the fact that the Northern Sc
cur1ties Company is a corporation organized
under the laws of the State Of New-Jersey; that
the Great Northern Railroad was organized
under the laws of the State OF Minnesota and
the Northern Pacific Railroad under the laws
of Wisconsin, and that the two last named
companies are common carriers doing an inter-
state business, and that these companies at and
prior TO the doing of the acts complained OF
owned and operated two separate, independents.
parallel and competing lines of railway aggre-
eating over ffty-five hundred miles in length.
the petition goes on 10 say;
They were the only transcontinentaI lines OF
railway extending across the northern tier OF
states west Of the Great Lakes, from the Great
Lakes and the Mississippi River to the Pacific
Ocean, and were then engaged in active COM
peJJlOn WIN one another Tor freight and
senger trafhc among the several States OF the
United States and between such States and
foreign countries. each system connecting at its
Eastern terminals not only with lines OF railway
but with lake and river steamers TO other States
and 70 foreign countries and at its Western ter
minaIs with seagoing vessels to other states.
Territories, and possessions Of the United States
and TO foreign countries.
GOVERNMENTS CASE STATED.
Prior to the year 1898 the Northern Pacific
system was owned ana operated by the North
ern Paclnc Railroad Company. a corporation
organized under certain acts of Congress. Dur
Ing that year the company became insOlvent and
was placed in the hands Of a receiver
While in this condition. awaiting foreclosure
and sale. arrangement was entered into be-
tween a majority Of the bOndholders OF the
Northern Pacific Railroad Company and the
Great Northern Company for a virtual COnsOli-
datlon OF the two, and placing the control OF the
Northern Pacific system in the hands Of the
Great Northern This arrangement contem-
plated the sale under foreclosure OF the North
ern Pacific Railroad Company 10 a committees
or bondhOldeTs. who should organize
pOratiOn. 10 be known as the Northern Pacific
Railway Company On6-half of the capital stock
of the company was turned over % the
Great Northern Company which, in turn was
TO guarantee the bonds of the Northern Pacific
Railway Company
The carrying out Of this arrangement was
defeated by the decision OF the United States
Supreme Court in the case Of Pearsall against
the Great Northern Railway Company, which
was decided on March 90, 1896. in which il was
held that the practical effect would be the con
solidation OF two parallel and competing lines OF
railway and the giving 10 the defendant the
OF all traffic in the northern half Of the State OF
Minnesota as we'll as OF all transcontinentaI
traffic north of the line of the Union Pacific 10
the detrtment OF the public and in violation OF
the laws Of the State of Minnesota
Early in the year 1901 the defendants +Fa
Great Northern and Northern Pacific Railws-
companies, IN contemplation Of the ultimate
placing Of the Great Northern and Northern
faClnc systems under a common source OF con-
troll. united in the purchase of the total capital
stock or the Chicago. Burlington and Quincy
Railway Company. OF Illinois. giving the Joint
bonds OF the Great Northern and Northern Pa
clic Railway companies
CONTROL OF BURLINGTON SYSTEM.
In this manner the great Northern and
Northern Pacific Railway companies secured
control Of the vast system OF lines known as
the Burlington system, about eight thousand
miles in length The attempt TO turn over a
controlling interest of the Northern Pacific Rail-
way Company to the Great Northern having
thus in the year 1896. been defeated by de-
ClSlon OF the supreme Court the defendants
James j Hill and his associate stockholders OF
the Great Northern, owning or controlling ma
jOrity of the stock, and the defendants J Pier
trolling a majority Of the stock OF the Northern
Pacific company entered into an unIaw-
ful combination or conspiracy 10 effect a virtual
consolidation OF the Northern Pacific and Great
Northern systems, and to place restraint upon
all competitive interstate and foreign trade or
commerce carried on by them, and 10 monopo-
lie or attempt 10 mOnOpOliZe the same and TO
suppress the Con1petltlOn heretofore existing
tween said railway systems in said Interstate
and foreign trade commerce through the in
strumentality and by the means Following. to
wit.
A holding corporation 70 be called the North
ern Securities Company was 70 be formed under
the laws of New-Jersey. with capital stock OF
S4OOOOO,OOO, TO which. in exchange for its own
capital stock upon a certain basis and at a Ger
tain rate, was TO he turned over and transferred
the capital stock. a controlling interest in the
capital stock. of each Of the defendant railway
companies
In this manner the individual stock ckhoIders OF
these TWO independent and competing railway
companies were TO be eliminated and a single
common StOCkhOider. the Northern Securities
Company, was 70 he substituted, the interest Of
the individual stockholders in the property and
franchises of the two railway companies was
TO terminate. being thus converted into an in
Northern Securities Company. The individual
stockholders OF the Northern Pacific Railway
Company no longer 70 hold an interest in
the property or draw their dividends from the
earnings OF the Northern Pacific system and
the individual stockholders Of the Great North
ern Railway Company were no longer 10 hold an
interest in the property or draw their dividends
tenn, but having ceased to h stockholders in
the railway companies. and having become
stockholders in the holding corporation. both
10 draw their dividends from the earnings
of both systems. collected and distributed by the
holding corporation
ALLEGED ILLEGAL MERGER
In this manner, by making the stockholders
TENS and by practically pooling the earnings OF
systems rha hfrafir OF rha fOrurar