The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-03-11
UNCLE SAM GOES
AFTER MERGER
Government Suit Against North
ern Securities Company Filed.
IN NAME OF THE GOVERNMENT
LITIGATION Is BEGUN TO DIS
SOLVE COMBINATION.

March 10,-By d.
w rection of the attorney general
of the United States, a bill was
filed at St. Paul today in the circuit
court of the United States for the dis
trict of Minnesota in the case Of the
United States, complainant, against the
Northern Securities company, the
Great Northern Railway company, the
Northern Pacific Railway company and
others, defendants. to test the legality
of the alleged combination or merger
of the two roads named in the bill. The
action is brought under the act Of July
> 1890, known as the Sherman anti
trust law.
After reciting the fact that the
Northern Securities company is a cor
poratiOn organized under the laws OF
the state of New Jersey; that the
Great Northern railway was organized
under the laws of the state of Min
nesota, and the Northern Pacific under
the laws OF the state Of Wisconsin,
and that the two last named companies
are common carriers, doing en- inter-
state business. and that these compa-
mics at and prior to the doing of the
tElE N0lllilGliAEN fL Wv llt-ll anu NtNA
ated two separate, independent, paral-
lei and competing lines Of railway ag-
gregating 800 miles in length, the pc
tition goes on to say that they were
the only transcOntinental lines of rail-
ways 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 competition
with one another for freight and pas
senger traffic among the several states
of the United States, and between such
states and foreign countries. each sys-
tenn connecting at its eastern terminus
not only with lines of railway but with
lake and river steamers to other states
and to foreign countries. and al its
western terminals with sea-going YES
sells to other states, territories and pos
sessions of the United States and to
foreign countries.
Arrangement an Old One.
That prior to the year 1893 the
Northern Pacific system was owned
and operated by the Northern Pacific
Railway company, a corpora ton or
ganized under certain acts of congress;
that during that year the company be
came insOivent and was placed in the
hands Of d receiver. While in this con-
dition awaiting foreclosure and sale an
arrangement was entered into between
a majority of the bondholders of the
Northern Pacific Railway company and
the Great Northern Railway company
for a virtual consolidation of the two,
and placing the control of the Northern
Pacific system in the hands of the
Great Northern. This arrangement
contemplated the foreclosure of the
Northern Pacific to a committee OF
bOndhOldeTS who should organize new
corporation to be known as the North
ern Pacific Railway company. One
half of the capital stock of the new
company was turned over to the Great
Northern company which in turn was
to guarantee the bonds of the North
ern Pacific Railway company.
The carrying out of this arrange
ment." saws the petition, was defeat
ed by the decision of the United States
supreme court in the case of Pearsall
against the Great Northern Railway
company. which was decided March 30.
1896. in which it was held that the prac-
teal effect would be the Consolidation
of two parallel and competing lines of
railway and the giving to the defend
ant. the Great Northern Railway COM
Dauv. monopoly of all traffic in the
northern half of the state of MinnesO-
ia. as well as of all transcOntinental
traffic north of the lines Of the Union
Pacific to the detriment Of the. public
and in violation of the laws of the state
of Minnesota.
Buy the C. B. q @.
Early in the year 1901. the defend
ants. the Great Northern and North
ern Pacific Railway companies, IN con-
temptation of the ultimate placing of
the Great Northern and Northern Pa
cifc systems under d common source
of control. united i'm the purchase of
the total capital stock of the Chicago.
Burlington & Quincy Railroad company
of Illinois. giving the joint bonds Of the
Great Northern and Northern Pacific
Railway companies.
In this manner the Great North
ern and Northern Pacific Railway
companies secured control Of the vast
system of lines known as the BurliRg-
tor system. about 5000 miles in length.
To attempt to turn over a controlling
interest of the Northern Pacific Rail
way company, having thus in the
year 1894 been defeated by a decision
OF the supreme court the defendants,
James J. Hill and his associate stock
holders of the Great Northern. owning
OF controlling a majority of its stock.
and the defendants. ]. PierpOnt Morgan
and his associates, owning or controil-
ing a majority of the stock Of the
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