The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-03-11

merly carried on by the two systems as
Independent competitors established
In further pursuance of the unlawfui
combination or conspiracy aforesaid, and
solely as an fundamentally through which
10 effect the purposes thereof, on OF about
the 18th day of November. 1901, the Northern
securities Company was organized by the
election OF a board of directors and the Sc
lection Of a president, James J. Hill, and
other officers, who. with their associate
stockholders of the Great Northern Ral-
way Company, assigned and transferred 10
the Northern Securities Company a large
amount of the capital stock OF the Great
Northern Railway Company, constituting a
controlling interest therein. and COM
plainant believes a majority thereof, upon
the agreed basis of exchange of $50 par
value of the capital stock of the Northern
Securities Company for each share OF the
capital stock of the Great Northern Hall-
way Company; and the defendant, j. PIER
pont Morgan. and his associate ~stocknoId-
erS OF the Northern Pacific Railway COM
pany. assigned and transferred 10 the de-
PENDANT, the Northern Securities Company,
a large majority of the capital stock OF the
Northern Pacific Railway Company upon
the agreed basis of exchange or Sll3 par
value Of the capital stock of the Northern
Securities Company for each share OF the
capital stock Of the Northern Pacllc KAN
way Company: and thereafter the North
ern Securities Company offered TO the
stockholders of the defendant railway COM
panies to issue and exchange its capltal
stock for the capital stock Of such railway
companies upon the basis Of exchange
aforesaid, no other consideration being re-
quired.
The defendant. the Northern Securities
Company, has acquired an addltlonal
amount of stock of the defendant railway
companies, issuing in lieu thereof its own
stock upon the basis of exchange afore-
said, and is now holding as owner ana
proprietor. substantially all of the capital
stock of the Northern Pacific Railway
Company, and, as complainant believes, a
majority of the capital stock co1 OF
pan By reason whereof, a Vlr-
tual consolidation under one ownership
and source of control of the Great Northern
and Northern Pacific railway systems mas
been effected, q combination or conspiracy
in restraint of the trade or commerce
among the several States and with foreign
nations formerly carried on by the defend
ant railway companies Independently and
in free competition, one with the other,
has been formed and is in operation ana
the defendants are thereby attempting 10
~mOnopoliZe, and a monopOlized, such
interstate and foreign trade or commerce,
TO the great and ~irreparable damage OF the
people of the United States in derogation
of their common rights and in violation or
the act of Congress of July >, 1890, entitled
An act to protect trade and commerce
against unlawful restraints and mOnopo-
lies
STOCKS SEQUESTERED.
eff the defendant, the Northern Securi-
ties Company, had not acquired a large
IldJOlllN " lIC aplloA W VI NV 0NLOh0
ant. the Great Northern Railway Com
pany, it is because the individual defend
ants named and their associates in the
combination or conspiracy charged in this
petition, or some of them, since it became
apparent that the legality of their corpor-
ate device for the merger of the stock of
competing railway companies through the
hstrumentality of a central or holding
corporation. would be assailed in the courts
has purposely withheld or caused to be
withheld a large amount of the capital
stock of the Northern Securities Company
and has purposely discouraged and pre-
vented the transfer and exchange OF such
stock of the Northern Securities Company,
all for the purpose of concealing the real
scope and object of the unlawful combin-
alton or conspiracy and of deceiving and
misleading the State and federal authori-
ties and of furnishing a ground for the
defense that the Northern Securities Com
pany does not hold a clear majority of the
stock of the Great Northern Railway Com
pany.
pany was not organized in good faith to
purchase and pay for the stocks of the
Great Northern and the Northern Pacific
railway companies. 1t was organized solely
to incorporate the pooling of the stocks
of said companies and to carry into effect
the unlawful combination or conspiracy
aforesaid. The Northern Securities Com
pany is a mere depository. custodian. holder
and trustee OF the stocks of the Great
Northern and of the Northern Pacific rail-
way companies, and it's shares of stock are
but beneficial certificates issued against
said railroad stocks to designate the in
terest of the holders in the pool. The
Northern Securities Company does not
nave and never had any capital sufficient
to warrant such a ~stupendouS operation.
It's subscribed capital was but $4,000, and
its authorized capital of $400, O0o,O 0 is just
sufficient, when all issued. TO represent and
cover the exchange value OF substantially
the entire stock of the Great Northern and
Northern Pacific companies upon the basis
and at the rate greed upon, which is about
S122. O06, 900 in excess of the combined CAPT
tai stock of the two railway companies
taken at par.
eff the government fails to prevent the
carrying out of his combination or con-
spiracy, not only will a virtual consolidation
of two competing transcontinental lines,
with the practical pooling of their earnings,
be effected and a monopoly OF the inter-
state and foreign commerce formerly car
ried on by them as competitors be created
and all effective competition between such
lines in the carrying of interstate and for
eign traffic be destroyed, but thereafter,
TO all desiring to use II, an available meth
cd will be presented whereby. through the
corporate scheme or device aforesaid, the
act or Congress of July ?. 1890, may be cir
cumvented and set at naught, and call
transcontinental lines-indeed, the entire
railway systems of the co~untry-may be
absorbed. merged and consolidated, thus
placing the public at the absolute mercy
of the holding corporation
The petition prays that the Northern Sc
c%urities Company, its stockholders, officers,
etc, be perpetually enjoined from pur-
chasing. voting, etc, any of the shares of
the capital stock of either the Northern
Pacific company or the Great Northern
company, and that a mandatory injunc-
ton may issue requiring the Northern
Securities Company 10 recall and cancel
any certificates of stock issued by it in
purchase of or in exchange for any of the
shares of the capital stock of either Of the
said railway companies, surrendering in
return therefor the certificates of stock in
the respective railway companies in lieu
of which hey were issued. II is also asked
that the defendants. the Northern Paci-
fc and the Great Northern railway com
panies. their officers, stockholders, etc, be
perpetually enjoined from i'm any manner
recognizing or accepting the Northern Sc
curities Company as the owner or holder
of any of the shares Of their capital stock
etc.
The petition is signed by Milton ID. Purdy
attorney of the United States for the Dis.
trict of Minnesota; Philander c.. Knox, at
torney general of the United States. and
John X. Richards. solicitor general of the
United States.