The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-03-11
GOVT ACTION BEGUN
Complaint Filed in the Northern Sc.
curities Case.
AsIMPLE BUT DIRECT DOCUMENT
1t Recites Legal History of Roads
Involved and Asks Perpetual
Injunction. ..s. e.

BY direction of the attorney general Of
the United States, the case Of the United
States against the Northern Securities
company, the Great Northern and North
.ern Pacific Railway company was form
ally commenced in st. Paul yesterday.
In the bill filed in the United States cir
cult court, the federal government takes
It's first step to test the legality of the
merger The action is brought under the
act OF July 2, 1890, known as the Sherman
antitrust law -
After reviewing the history of the or
ganizatien Of the Northern Securities, the
Great Northern and Northern Pacific COM
panies. the complaint refers to the at
tempted consolidation of the two roads
after the Northern Pacific became in
solvent in 1888, and it's defeat in the case
of Pearsall VS.. the Great Northern, in
which the court ruled that the consolida-
tton OF two parallel lines of railway, Civ
ing the Great Northern a monopoly of all
traffic in northern Minnesota and of all
transcontinental traffic north Of the Union
Pacific would be violation of the laws
OF the state and detrimental to public in
terests. s.
The complaint cites the community of
interests proposition which resulted early
in 1901 in the purchase by the defendants
OF the stock of the Burlington
The defendants then entered into an
alleged unlawful conspiracy to effect a
virtual consolidation by the organization
Of the Northern Securities company. I'M
der the laws OF New Jersey, with capt.
tai stock of $500, 900 900, to which was to
be transferred the capital stock of each
OF the defendant companies. The individ-
ual stockholders of both railway com
pan1es, having ceased to become such
and having become stockholders in the
holding corporation, were both to draw
their dividends from the earnings OF both
f1I
Nor thern Securities company
By making the stockholders of Zach svs-
tenn Jointly interested in both, by pool
ing the earnings Of both systems for the
benefit OF the former stockholders of each
and by yesting the selection of the direc-
tors and officers of each system in a com
mon body, all inducement for comnetitior
was to be removed, virtual consolidation
effected, and the monopoly of the inter
state and foreign commerce. formerly
carried on by the two systems. estah.
lished.
Upon the organization of the Northern
Securities company, the complaint mr.
ther recltes. the officers of the two sys.
tens, James j. Hill, j. Pierpont Morear
and the officers and stockholders of The
Two companies transferred large ma
jority of the stock of the Great Northern
and Northern Pacific companies on the
agreed basis of exchange of $3.50 and S11s
respectively par value of the capita'
stock OF the Northern Securities company
Thereafter the Northern Securities com.
pany offered to exchange it's capital stool
for the capital stock of such railway com.
panies upon the basis of exchange agreed
upon, no other consideration being re.
. CURED
In order to conceal the streal scope an6
object of the unlawful continuation i
is further alleged that the Northern Sc
F. cur1ties company has purposeIy discour.
aged and prevented the proposed ex.
change Of stock in order to furnish
ground for the defense that the Northern
Securities company does not hold clea1
majority of the stock Of the Great North
ern.
1t Is also alleged that the Northern Sc.
curities company was not organized il
good faith to purchase and Ray for thu
stocks of the Great Northern and the
Northern Pacific. and that 1t was or
ganized solely to permit the pooling o
the stocks Of the two companies.
The petition prays that the Northern
Securities company, it's stockholders
officers, etc, be perpetually en-
joined from purchasing, voting
etc., any of the shares of the cap
ital stock Of either the Northern Pa
cific or Great Northern companies an,
that mandatory injunction may issu
requiring the Northern Securities com
pany to recall and cancel any certificate
of stock issued by it in purchase Of or ii
exchange for any Of the shares of thu
capital stock of either of the said rail
way companies, surrendering in return
therefor the certificates of stock in tn
respective railway companies in lieu Q