The Savannah morning news. (Savannah, Ga.) 1900-current, 1902-03-11
A COMBINE KNOCKER
MIR. KNOWS ANTI-MERGER BILL
FILED AT ST. PAUL.
TRUST ISSUE SoUARELY PUT.
FUTURE OF COMBINATIONS MAY
DEPEND ON RESULT.

consequences winch would FOX
low Such "a Combine of Two Trans
continental Lines-Such a Method
of Evading the Antitrust Law
Would Result in Eventually Buy
ing the Entire Railway Systems.
ST. Paul, Mimi, March 1O-By direc-
ton ofthe encouragement of the Uni
ted States a bill 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,
curities Railway Company, the North
ern Pacific Railway Company and
others, defendants, to 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 2, 1890, known as the
Sherman antitrust act.
After reciting the facts as to the or
ganization of the Northern Securities
Company, the Great Northern Rail-
road and the Northern Pacific Railroad,
the petition goes on to say that they
were the only trans-continental lines
of railway extending across the North
ern 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
petition with one another for freight
and passenger traffic"
The Northern Pacific Railroad Com
pany, it is recited, became insolvent
in 1898. and was placed in the hands of
a receiver. While in this condition an
arrangement was entered into between
a majority of the bondholders of the
Northern Pacific Railroad Company
and the Great Northern 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 sale under foreclos-
ure of the Northern Pacific Railroad
Company to a committee of bondhold-
ers, and that the Great Northern Com
pany should guarantee the bonds of the
Northern Pacific Railway Company, in
return for one-half of the stock of
new Northern Pacific Company.
THE carrying out of this arrange
ment," says the petition, "was defeated
by the decision of the United States
Supreme Court in the case of Pearsall,
against the Great Northern Railway
Company in 1896, in which it was held
that the practical effect would be the
consolidation of two parallel and COM
peting lines of railway, and the giving
to the defendant, the Great Northern
Railway Company, monopoly
of all traffic in the north
ern half of the state of Min
nesota, as we'll as of all trans-conti-
mental traffic north of the line of the
Union Pacific.
The HilI-Morgan Combine.
The fact of the joint purchase by
the Great Northern and Northern Pa
cific systems of the Chicago, Burling-
ten and Quincy Railway Company
with it's 5000 miles of track is next
recited, and it is then charged that
James ]. Hill and his associates of the
Great Northern, and j. Pierpont Nor
gan and his associates of the North
ern Pacific, entered into an unlaw-
full combination or conspiracy to eff
feet a virtual consolidation of the
Northern Pacific and Great Northern
systems and to place restraint upon
all competitive interstate and
foreign trade or commerce car
ried on by them, and to
monopolize or attempt to mo-
nopolize the same and to suppress
the competition heretofore existing
between said railway systems in said
interstate and foreign trade or com
merce, through the fundamentally of
a holding corporation, to be called
the Northern Securities Company, to
which, in exchange for it's own capt.
tai stock, was to be turned over and
transferred the capital stock, or a
controlling interest in the capital
stock of each of the defendant rail-
way companies. In this manner the
petition says, the individual stock
holders of these two Independent and
competing railway companies were to
be eliminated and a single common
stakeholder, the Northern Securities
Company, was to be substituted.
Nice Plan for Stockholders.
In this manner, by making the stock
holders of each system jointly inter-
ested in both systems, and by practi-
cally pooling the earnings of both sys-
TENS for the benefit of the former
stockholders of EACH and by vesting
the selection of the directors and Off
GERS of each system in a common body,
to wit, the holding corporation, with
not only the power, but the duty to
pursue a policy which would promote
the interests, not of one system at the
expense of the other, but of both at the
expense of the public, all inducement
for competition between the two sys-
TENS was to be removed, a virtual con-
solidation effected and a monopoly of
the interstate and foreign commerce
formerly carried on by the two systems
as Independent competitors established.
The petition next recites in further
pursuance of this unlawful combination
or conspiracy the Northern Securities
Company was organized and stock of
the Great Northern Railway turned
over to it on a basis of $3.50 share
and of the Northern Pacific Company
at St15 a share.
The Northern Securities Company, it
is alleged, is now holding, as owner
and proprietor, substantially all of the
capital stock of the Northern Pacific
Railway Company and as complainant
believes, a majority of the capital stock
of the Great Northern Railway Com
pany. By reason whereof, a virtual
consolidation under one ownership and
source of control of the Great Northern
and Northern Pacific railway systems
has been effected, a combination or
in restraint Of the trade or
commerce among the several states and
with foreign nations. formerly carried
on by the defendant railway companies
and in free competition,
one with the other has been formed
and is in operation. and the defendants
are thereby attempting TO monopolize
and have monopolized such interests