Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-03-11
MERGER FIGHT BEGUN
Attorney General Knox Files Pc
tition in the Merger Suit
at St. Paul.
The Action Brought Under the
Law Known as Sherman
Antitrust Act.
History of the Securities Com
pany Deal and Its Objects
Reviewed.

States u Dill was MED at 81. Gaul late
yesterday afternoon in the circuit court
of the United States for the district
States, complainant, against the
! Northern Securities Company. the
Great Northern Railway Company, the
4 Northern Pacific Railway Company
and others, defendants, to test the le-
gality 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
The petition states that the defend
ant companies Were the only trans
continental lines of railway extending
across the northern tier of states west
of the Great Lakes and the MISSISSIPPI
! river to the Pacific ocean and We're
| 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
TEN connecting at it's eastern termi-
nails, not only with lines OF railway,
but With lakes and river steamers TO
other states, and to foreign countries,
and at it's western terminals with sea-
going vessels to other states, territor-
| les and possessions of the United
States and to foreign countries.
That prior to the year 1898 the
Northern Pacific system was owned
and operated by the Northern Pacific
Railway Company. corporation or
ganized under certain acts of congress;
that during the year the company be-
come insolvent and was placed in the
hands of a receiver. While in this
condition. awaiting foreclosure and
sale, an arrangement was entered into
between a majority of the stockhold-
ers of the Northern Pacific Railway
Company for virtual consolidation of
the two and placing the control of the
Northern Pacific system in the hands
of the Great Northern This arrange
ment contemplated the sale under
foreclosure of the Northen Pacific
company to committee of bondhold-
ers who should organize n new cor
poration to be known as the Northern
Pacific Railway Company. One half
of the capital stock of the new COM
pany 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." says the petition, was de-
feated by the decision OF the United
States supreme court in the case of
Pearsall against the Great Northern
Railway Company, which was decided
M jp 1yh ipt hal
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 northern half of the
state of Minnesota, as we'll as of all
transcontinental traffic north of the
line of the Union Pacific. to the detri-
ment of the public and in violation of
the laws of the state of Minnesota.
EARLY in the year 1901 the defend
ants the Great Northern and Northern
Pacific Railway companies, in con-
temptation of the ultimate placing of
the Great Northern and Northern Pa
cific systems under common source
of control, united in the purchase of
the total capital stock of the Chi
cago, Burlington & Quincy Railway
Company of Illinois. giving the joint
bonds of the Great Northern and
Northern Pacific Railway Companies.
in this manner the Great Northern
and Northern Pacific railway compan-
les secured control of the vast system
of lines known as the Burlington sys-
tenn. about S,0oQ miles in legnth. The
attempt to turn over controlling in
terest of the Northern Pacific Rail
way Company to the Great Northern,
having thus, in the year 1896, been de-
feated by decision of the supreme
court, the defendants. lanes ] Hill and
his associate stockholders of the Great
Northern, owning or controlling a ma
tority of its stock, and the defendants,
j. Pierpont Morgan and his associates,
owning or controlling a majority of the
stock of the Northern Pacific Company
entered into an unlawful com
bination or conspiracy to effect vir
tual consolidation of the Northern Pa
cific and Great Northern systems, and
to place restraint upon all competitive
interstate and foreign trade or com
merce carried on by them, and monop-
Ollie or attempt to monopolize the
same, and to suppress the competition
heretofore existing between said rail-
railway systems In said interstate and
foreign trade, or comerce, thru the in
strumentality and by the means fol-
lowing, to-wit: A holding corpora
ton, to be called the Northern Secur-
tiles Company, was to be formed I'M
der the laws of New Jersey with q
capital stock of s4o0,000,000, to which.
in exchange for its own capital stock
upon a certain basis and at a certain
rate, was to be turned over and trans
ferred the capital stock, or a controll-
ing interest in the capital stock, of
each of the defendant railway COM
panies.
The defendant, the Northern Securi-
ties Company, has acquired an addi-
tional amount of the stock of the de-
PENDANT railway companies, issuing in
lieu thereof it's own stock upon the ba
sis of exchange aforesaid, and is now
holding. as owner and proprietor, sub
stantially all of the capital stock of the
and, as complainant believes n major
ity of the capital stock of the Great
Northern Railway Company. BY rea-
son whereof virtual consolidation I'M
der one ownership and source of con-
troll of the Great Northern and North
ern Pacific railway systems has been
effected, combination or conspiracy in
restraint of the trade or commerce
among the several states and with for
eign nations formerly carried on by the
defendant /, railway companies, indie
in,