The Saint Paul globe., 1902-03-20
STILL PROBE MERGER
JOHN s. KENNEDY TELLS WHAT
HE KNOWS OF FORMING Sc
CURITIES COMPANY
LONG PREPARATION MADE
Object in beginning, He Says, Was
Simply to Protect Northern Pa
Pacific Stock From wild
Raids on Wall street.

NEW YORK, March 19.-There was a
hearing in this city today before Rich
ard A. Mabey, special commissioner, and
William A. Lancaster, of Minneapolis,
special examiner, in the suit Of Peter
Power against the Northern Pacific Rail
way company. The object of the suit is
to overthrow i e transfer to the North
ern Securities company of the control
of the Northern Pacific.
John S. Kennedy, a banker, was the
first witness today. He said he went to
Europe in the spring Of 1901, and that,
when he left, James J. Hill and Lord
Strathcona, D. Willis James, George F.
Baker, himself and other friends of
James ]. Hill owned a majority of the
common stock of the Northern Pacific.
The witness understood that 1auch of the
stock was held by J. P. Morgan & Co.
The witness did not know before he
went to Europe that E. H. hartman
sought to acquire a majority of North
ern Pacific common. He learned from ].
P Morgan about May or that some
interests in New York were making large
purchases Of Northern Pacific, and later
he was informed that these purchases
were for Mr.. Hartman. In the following
August Mr.. Kennedy said he acquired
10000 shares of Northern Pacific from j.
p. Morgan & Co.
Securities Company Long Forming.
Mr.. Kennedy said he was told in Au-
gust that ]. p. Morgan & Co. would
like to dispose of some of their holdings,
so he agreed to take 10000 shares. In re-
ply to a qeustion he said he had not
heard that between May 1 and May 8
J. P. Morgan had purchased from $16,OOO,-
coo to $1S 100000 of the stock.
Mr.. Kennedy said that the Northern
Securities company had been thought Of
for a great many years before it was
formed. 1t was true, he said, that Mr..
Hill and his associates had no difficulty
in electing directors of the Great North
ern ra1Tay. Originally the plan was to
turn over to the Northern Securities COM
pany only the Great Northern shares
held by the controlling interests, but later
this was modified so as to allow all stock
holders to convert their shares into
Northern Securities stock.
'In the autumn Of 1901 did not these
gentlemen have majority of both the
Northern Pacific and the Great Northern
stocks?" Mr.. Kennedy was asked
Il did not know about the stock of
the Great Northern. l did know they
held majority of the Northern Pacific
stock-at least 1 was so informed was
the answer.
Mr.. Kennedy said that the object of
the Northern Securities company was to
protect the holdings of the Northern Pa
cific against such an attack as occurred
last spring. He said that originally it
was the idea to pool the Northern Pacific
stock only
WAS it the purpose Of you gentlemen
to place the stock of the Northern Securi-
ties on the market for miscellaneous pur-
chasers?" asked Mr. Lancaster.
81 cannot remember that any such
thing was ever discussed or suggested" !"
Knows Nothing of Hills Acts.
~
other property besides the Northern Pa
cific and the Great Northern?"
Mr.. Kennedy said there had been sug-
gestions in that direction. He knew moth
ing of his own knowledge about a pur-
chase Of $1l,00O000 or 600 of Great
Northern stock o. Mr.. HILL He under
stood the stock was purchased, but he
did not know now much. He purchased
10000 shares himself.
The examiner next turned his atten-
ton to the election of Mr. Hartman to
the directorate of the Chicago, Burling-
ton & Quincy Railway company. Mr..
Kennedy said he could not give him any
informa ton as to why Mr.. Hartman was
elected a director of the Burlington
DO you know that at the time their
names were proposed for election on the
board of directors of the Northern Pa
cific company the relations between Mr.
| Schiff and Mr.. Hartman were very much
strained?' asked the examiner
Mr.. Kennedy answered that he did not
know it.
This closed the examination of Mr.. Ken
nedy.
George ]. Perkins and Charles B. Steel,
member of the firm of J. p Morgan &
Co., were to have been heard today, but
it was impossible for them to attend.
1t was then arranged that the hearing
should be resumed at 2 o'clock tomor-
row afternoon. After Mr. Perkins and
Mr. Steel have testified, Jacob H. Schir
will be called.