Evening star., 1902-03-11

''In further pursuance Of the unlawful
combination or conspiracy aforesaid, and
solely as an instrumentality through which
to effect the purposes thereof, on or about
the 14th day of November. 1901, the North
ern Securities Company was organized by
the election Of a board of directors and the
selection Of president, James ]. Hill. and
other officers. who. with their associate
stockholders Of the Great Northern Com
pany, assigned and transferred to 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 majority thereof. upon
the agreed basis OF exchange OF $3.50, par
value, Of the capital stock Of the Northern
Securities Company for each share OF the
capital stock of the Great Northern Rail-
way Company: and the defendants. j. Pier
pont Morgan and his associate stockholders
of the Northern Pacific Railway Company,
assigned and transferred to the defendant.
the Northern Securities Company. large
majority of the capital stock of the North
ern Pacific Railway Company, upon the
agreed basis OF exchange OF $115. par value
Of the capital stock Of the Northern Secur1.
ties Company for each share OF the capltal
stock of the Northern Pacific Railway Com
pany; and thereafter, the Northern Securl-
ties Company offered to the stockholders OF
the defendant railway companies 10 issue
and exchange its capital stock for the capl-
tai stock of such railway companies upon
the basis of exchange Aforesaid no other
consideration being required. Ihe deIenoaht'
the Northern Securities Company, mas ac-
quired an additional amount OF the stock
Of the defendant railway companies issuing
in lieu thereof it's own stock upon the pa
sis of exchange aforesaid, and IS now noiu l-
ing as owner and proprietor, substantially
all of the capital stock of the Northern IA.
cific Railway Company, and as complalnaht
believes majority Of the capital STOCK Oh
the Great Northern Railway Company,
A Virtual Consolidation Erected.
''By reason whereof, a virtual cOnsolida-
ton under one ownership and source OF
control Of the Great Northern and Nortn-
ern Pacific railway systems has been erect
ed combination or conspiracy In restralt
of the trade or commerce among the sew
eral states and with foreign nations former
ly carried on by the defendant railway COM
nanies independently and In free compe-
tition one with the other has been formed
and is in operation, and the de1endantS arc
thereby attempting to monopollze ana htiVe
monopolized such interests and Foreign
trade or commerce, to the great, irrepara-
BILE damage of the people OF the Onlteu
States in derogation OF their common
rights and in violation of the act or Con
gress Of July g 1890, entitled An act TO
protect trade and commerce against uniaW-
full restraints and monopolies.' -
eff the defendant the Northern Securities
Company, has not acquired large major
ity of the capital stock Of the defendant.
the Great Northern Railway Company. 1t is
because the individual defendants named
and their associates in the comblnatloh OF
conspiracy charged In this petition. or some
of them since it became apparent that the
legality Of their corporate devise for the
merger Of the stock Of competing railway
companies, through the instrumentality or
central or holding corporation, could be as
sailed in the courts have purposely with
held, or caused to be withheld, large
amount Of the capital stock of said railway
company from transfer for the stock of the
Northern Securities Company, and have
purposely discouraged and prevented the
transfer and exchange of such stock OF the
Northern Securities Company, all for the
purpose of concealing the real scope and OBJ
ject of the unlawful combination or con-
spiracy and of deceiving and misleading the
state and federal authorities. and Of fur
nishing a ground for the defense that the
Northern Securities Company does not hold
a clear ma jority Of the stock of the Great
Northern Railway Company.
Cause Of Organization.
The Northern Securities Com
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 sole
ly to incorporate the pooling of the stocks
of said companies and to carry into effect
the unlawful combination conspiracy
aforesaid. The Northern Securitse Com
pany is a mere depository, custodian
holder and trustee of the stocks of the
Great Northern and the Northern Pacific
railway companies, and it's shares of stock
are but beneficial certificates issued against
said railroad stocks to designate the inter-
est of the holders in the pool. The North
ern Securities Company does not have and
never had any capital sufficient to warrant
Such a stupendous operation. It's sub
scribed capital was but $50 600 and its an
thorized capital stock of 100000 600 is lust
sufficient, when all issued, to represent and
cover the exchange value of substantially
the entire stock of the Great Northern and
Northern Pacific railway companies upon
the basis and at the rate agreed upon, which
Is aDout sl22,OOO,OOO in excess of the com
oliled capital stock OF the two railway COM
panies taken at par.
II the government fails to prevent tbe
carrying out of the combination or CON
splracy, not only will virtual consolidation
oI ,,,,. Two competing transcontinental lines,
with the practical pooling of their earn
ings, be effected, and MONOPOLY OF tha
interstate and foreign commerce formerly
carried on by them as competitors he
created, and all effective competition be-
tween such lines in the carrying of inter
state and foreign traffic be DESTROYED. but
thereafter, to all desiring to use # an
aVallable method will be presented, where
Dy, lhrcugh the corporate scheme Of devise
aforesaid. the act Of Congress of July
le9O may be circumvented and SET a.
naught, and all transcontinental lines in
DEED, the entire railway systems of the
may NC dDSOTDeu, merged and
solldated, thus placing the public at the ah-
soiute mercy OF the holding corporation"
Perpetual Injunction Wanted.
The petition prays that the Northern se-
curities Company. its stockholders. officers
ETC., be perpetually enjoined from DUR
chasing, voting, ETC.. any Of the shares OF
the capital stock of either the Northern Pa
cifc or Great Northern companies and that
a mandatory injunction may issue recurring
the Northern Securities Company to recall
and cancel any certificates Of stock issued
by 1t In purchase Of or In exchange for any
or the shares Of the capital stock of either
OF the said railway companies surrender
Ing In return therefor the certificates OF
stock In the respective railway Companies
in lieu of which they were issued. It is also
asked that the defendants, the Northern
Pacific and the Great Northern rail
way companies, their officers stockholders
ETC., be perpetually enjoned from in anv
manner recognizing or accepting the North
ern Securities Company as the owner or
holder of any Of the shares of their capital
stock, etc.
The petition is signed by Milton D. Purdy.
attorney Of the United States for the dis
trfct of Minnesota; Philander c. Knox. At
torney General Of the United States. and
John Il Richards solicitor papor,l 90 ~.