The Providence news. (Providence [R.I.]) 1891-1906, 1902-03-27
Explains Connection of His Firm
With Organization of Northern
Securities CO.--Frank Witness.

par face value. It did not involve so very
much money"
did you or your firm buy any North
ern Pacific at that timer"
I'VE did not"
Your firm has represented Northern
Pacific since the reorganization
'1t has"
"If any financial matters were 10 be
carried out for Northern Pacific would
your firm have undertaken it?''
"It would"
"Have you loaned the Northern Pacific
large sums OF money!
AT times"
These loans were for the account OF
your house,"
I'VE have negotiated their loans"
Whose money!
1--WE have obtained the money where
ever We could get st."
Il suppose a reasonable commission is
always paid TO the banker?"
Not always. No not always"
'Do you ever do work for nothing7"
Sometimes we do. There is not always
a reasonable commission"
Mr. Morgan. haven't you taken a great
interest in the Northern Pacihc?'
Il have"
Haven't you known about the earn
ings, etc. ?"
II haven't known about the detail, but
the general policy"
NORTHERN PACIFIC POLICY.
What has been the policy, and has II
been conducted as an Independent organ
ization?"
$50 far as l know"
Had the stock from 1896 to 1901 been
controlled by any other road?"
'It had not"
"Since you reorganized the road 1t has
ho.s hac tf
II believe So"
1T has paid dividends right along?n
You can find that in the reports"
THE Great Northern has been conduct
ed sharply in competition with the North
ern Pacific, has IL not2 The Great North
ern has several times increased i;s capt.
tai stock, has IL not?'
II don't know"
Its earnings have been very large,
too?"
Yes"
when was it decided to dissolve the N
p. voting trust?"
"In October. 1901, think For the rea-
son that the road could be turned over "a
the stockholders so that the latter could
decide important questions"
'wiil you explain why the question OF
retiring the preferred stock OF Northern
Pacific was not referred to stockholders? ??
THE directors had the absolute power
to retire the preferred, and IL is not fol
me to question their acts"
Mr.. Morgan then explained that at the
time OF the reorganization OF the North.
ern Pacific, the preferred stock was is.
sued for the purpose of meeting the obli.
cations OF the road, when the public
would not have looked with favor upor
a bond issue. The preferred was always
looked upon as an Issue TO obtain a tenn.
porary loan to be retired and exchanged
for common. I'VE soon found that IL had
been very wise plan"
s75,OoOcOo IN CASH.
"Then S50Oo.OoO was raised In cash7"
"It was"
Wasn't most of the stock held in very
large blocks7"
lin large amounts, yes"
There was some interruption here. and
Mr.. Lamb said that he had met with un.
expected frankness from Mr.. Morgan
Lawyer Lamb. in fact. had considerable
difficulty In following Mr.. Morgan's quick
| answers and in framing his questions will
sufficient rapidity. lie asked:
"You were managing the affairs OF tn,
Northern Pacific then when the Northern
Securities matter was taken up2"
mo, the board OF directors was man
aging its affairs"
'Sgho first suggested the Northern Sc
curities cOmpanyy'
In 1898, about I made up my MIND
! that it was advisable that the Northorr
| Pacific should have an eastern terminus
at Chicago. Also that tho New Yorl
| Central should so 10 Chicago I'm order 4
| establish a transcontinental line
Il came 20 the conclusion that ther,
was a question between the St Paul an,
Burlington as n link 90 Chicago favore,
| the 81. Paul ] spoke to Afr. IIiil an,
| told him he had better acquire "a. IL
wanted 20 take Burlington. but he sal,
| all right We did not go AT ~ in a Sc
| cret manner. We went directly 90 tn
\ board of directors Some Of them favorcs
| n and others did not. Mr.. TIin though
Burlington offered a better chance for tn
4 distribution OF business 50. Paul dlreo
l tors refused. and VS. aecided not 70 tr,