River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1902-05-15


reached by the Great Northern and
Northern Pacific lines, and by their con-
Meeting lines of shipping on the Pacific
Cos St These connections and such in
terchange of traffic were deemed to be
and are indispensable to the maintenance
Of their business, local as well as inter
state, and to the development of the
country served by their respective lines,
and of like advantage to the Burlington
lines and the country served by them,
and strengthen each company in the COM
petition with the more southerly lines to
cifc railway, and with European carriers,
for the trade and commerce of the
Orient.
In such purchase there was no pur-
| pose to lessen any competition of the
Burlington lines with those of either Of
the purchasers, for they are not Compel
was not intended to have, and it cannot
have, any such effect.
The purchase Of the Burlington stock
was not made in view of the formation
of this defendant, but solely from the
motives and with the purposes already
stated.
No Connection with the Pearsall Case.
The project of forming a holding com
| pany of any kind, was not the result, IN
any waW of the failure of the plan which
/ was defeated by the decision OF the Su-
| preme court in the PearSaH case. Ihefe
was 10 connection whatever between the
/ two.
The project Of a holding company which
/
! this defendant had its inception years
] before that date. among several gentle
/ men, not exceeding ten in number, who
! had been large shareholders in the Great
! Northern company and its predecessor,
| the st. Paul, Minneapolis and Manitoba
| Railway company; some of them from the
original organization of the latter COM
pany in 1879 and others from dates not
long after that time. They have never
held majority of the stock of the Great
Northern company, but have taken an ac-
tive interest in its policy and administra-
ton; have aided it when necessary in
financing it's operations; have acted to-
gether in promoting it's interests; have,
with some exceptions served from time
to time as directors and officers (Mr. Hill
having been president of the successive
companies since 1892; and by reason of
their active interest in the company and
services to it, have influenced, to large
degree, it's policy and management AS
far back as 1893, most of these gentle
advanced, in years, they began to dis
cuss together what would be the effect
upon the policy, which under their in
| fiuence the company had pursued with
great benefit to it's shareholders, and the
public, should their holdings by death or
otherwise become scattered, and by what
means their holdings could be kept to-
gether, so as to secure the continuance
of such policy in the management of the
company. 1t was considered that II
company should be formed to which they
might transfer their individual holdings,
their shares were likely to be held to-
gether, so long as the majority in tn. the
would tend to give stability to the policy
of the Great Northern company, be of aid
! to it in financial operations, and maintain
| the value of their investments. These
conclusions were the result of various
consultations among. the persons men
! toned, or some of them, but no definite
agreement was made for forming such
company or binding any one to transfer
| his shares to it If formed
Purchasing Northern Pacific.
From time to time, beginning with the
company in 1896 Mr.. Hill and said other
! Great Northern shareholders who had dis
cussed with him the plan of forming
holding company, had made large pur-
chases of Northern Pacific shares, indi-
vidually each for himself, without any
concerted action: and solely as invest
gate holdings of the common stock of the
Northern Pacific company amounted to
of the eighty million. dollars $3.50, 600 OOO)
common stock of the company,
which also had a preferred stock,
doara rs oo wth the same vo
ing power as the common stock. At this
time the firm of j. P. Morgan & CO. held
the common stock. In the fall of 1900
Mr.. Hill and said Great Northern share
holders discussed the question of putting
| their holdings of Northern Pacific stock
into the proposed holding company,
well as the suggestion that all the other
stockholders of the Great Northern com
selling and transferring their shares to
the holding company and that its capital
| stock should be made large enough to
able it to buy such holdings. though it
was not known that the holders of any
considerable amount of Great Northern
stock, other than those above named,
would desire to make such transfer.
Move of the Union Pacific.
At the time of the purchase of the Bur
lington shares, it was not contemplated
/ by either purchasing company, or it's
the purchasing companies, or among their
| shareholders, was needed to preserve to
each company it's fair share of the adj
! Vantages secured by the purchase. 1t
was thought that the manifest interest
| of each company rendered any further
| guaranty or security needless. But pend
| negotiations for the Burlington stock,
parties ACTING in the interest Of the Union
! Pacific Railway System, did purchase
Northern Pacific shares, both common
| and preferred, to the amount of about
| seventy-eight million dollars ($7SOO0, O0O),
| being a clear majority of the entire cap
ital stock of that company. The appar-
| ent intent of such purchase was to de-
feat and, if successful, it would have de-
| feated, the carrying out OF the purposes
| for which the Burlington shares had been
bought by the Great Northern and North
ern Pacific companies, and the develop,
ment of the interstate and international
| commerce of each of them and would
have subordinated the policy of each to
an interest adverse to both the Great
| Northern and Northern Pacific companies,
and to the public served by their lines.
To protect the interests of the share
| holders of the Northern Pacific company,
! J. p. Morgan & Co made additional pur-
| chaSeS of Northern Pacific common stock,
! which, with the holdings in said stock of
| Mr.. Hill and other Great Northern share
| holders who had discussed with him the
| plan OF forming holding company, con-
| stituted about forty-two million dollars
| ($42, 600, 000), being majority of the
| common stock. In view of the injury APP
pretended to both companies, and to their
| shareholders, and the better to protect
/ their interests in the future, the Great
! Northern shareholders holding Northern
| Pacific shares, deemed it advisable that
have power to purchase not only their
| own Great Northern and Northern Pa
/ citiC shares but also the shares of such
| other Great Northern and Northern Pa
! citic shareholders as might wish to sell
their stock to sad holding company, and
! the shares of companies already formed,
! and others that might be formed, for the
/ purpose of aiding the traffic or operations
| of the Great Northern and Northern Pa
| cific companies respectively. At this time
| it was not expected by any of the persons
! shat es except the said forty-two million
! dollars ($42, O00, 000) would be acquired by
the proposed holding company. The or
/ ganization of such company was not de-
acquire a majority of the shares of either
! defendant railway company. 1t would
/ have been organized if the Burlington
purchase had not been made, and if its
/ transfer to it than the thirty-four mil
/ lion dollars 1884, 600. 000) Great Northern
stock and the twenty million dollars $780,
| 600, 000) Northern Pacific stock, held by
/ that all or how many of the shareholders
/ of either of the railway companies would
/ be likely TO transfer their shares to this
| defendant when formed After its organ
loot n 6nfp hO1IUhf ST